Economics of Healthcare
Instructor Kristie Racca
South University Online
Sunday April 7, 2013
National health expenditures have increased over the last 39 years. Out-of-pocket costs and third-party payments have increased significantly. From 1970-1980, out-of-pocket costs doubled and the total of health care expenditures nearly tripled. Also, out-of-pocket costs increased from 1980-2000 but haven’t increased drastically since 2003. However, the increases in out-of-pocket costs are consistent through 1970-2009.
Third-party payments have increased from 1970-1980 similar to out-of-pocket costs. Moreover, increases remained significant through 1970-2009. During each decade, healthcare expenditures for out-of-pocket costs have raised an average of $40 million dollars. Third-party payments show similar increases. These increases may have something to do with increasing population in the U.S. and, the increased supply and demand for healthcare in the U.S.
The demand for healthcare is based on several factors. Health status, demographic characteristics, economic standing and education are the factors and depend on the patient. It is categorized by an equation (demand for medical care= M, health status, demographics, economic standing and physician factors). According to reports, a person will normally seek medical care because of symptoms of ill health, usually due to accident, injury, or some episode of illness. He or She has a desire to remain healthy and hence takes some measures towards ensuring good health. He or She may seek preventive care (an annual flu shot, for example) or treatment for an acute or sudden episode of illness or at the onset of a chronic condition (Online Lectures, 2013).
Demographic characteristics depend on changes in family structure, changes and differences in care needs, and racial disparities or lifestyles. These...